5 these publishers are considered by our membership to be an act of piracy. These contracts demand that the author warrant that he or she is the sole creator of the work but provide that all rights including the copyright be turned over to the publisher. In such contracts, the publisher claims to be considering the writer an employee while other paragraphs in the same contract declare that the employer is not responsible for customary benefits to employees, such as weekly paychecks, contributions to social security, et cetera. One magazine worded such a paragraph this way: "In all respects other than under the copyright law, you shall function as an independent freelance contributor, not as an employee of the company," unquote. It goes on to say, "That means the magazine will be the owner of all rights to your material throughout the world in all languages. The magazine and its licensees shall also have the right to use your materials and your name, likeness, biography, and photograph for editorial, advertising, trade and/or promotional purposes," unquote. In this instance, the publisher pockets all future revenues from reprint of the work. In a recent survey of rates paid to ASJA members, one factor stood out. We cannot survive with one-time payments for well-researched and well-written articles that have future resale potential that is denied by the work for hire coercion. Yet, many writers cannot refuse to sign or not accept work; it is an ultimatum. This puts the self-employed, nonunion, nonorganized writer in an unequal and an unfair bargaining position. A small number of publishers have the entire industry tied up while a large and relatively unorganized population of freelance writers, artists, and photographers need an outlet for their creative efforts. Thus, there is a specialized concentrated industry on one side and on the other a highly competitive and unorganized population of talented people who need the protection of a just law to be able to continue to create and survive financially. The continuing and increasing specialization of periodicals suggests that writers have a limited number of markets for article ideas. We are also concerned that, as more publishers consider entering the lucrative area of electronic publishing, they may apply economic pressure to acquire the copyrights for their own use without fair compensation to the author. In our view, these publishers' demands that our freelance members perform work for hire as employees in the eyes of the law but without any of the benefits or protections of employees is unconscionable. We also believe that these practices could ultimately inhibit the free flow of ideas and information, which is so precious to all Americans. We urge affirmative action on this bill by the committee and by the full Congress. Thank you. Senator MATHIAS. Thank you very much, Ms. Roth. Mr. Karp? Mr. KARP. Mr. Chairman, my name is Irwin Karp. I am attorney for the Authors League of America, the national society of professional authors. The league appreciates this opportunity to testify in support of Senator Cochran's bill. I will not read my statement. I submit it for the record and will summarize it. Senator MATHIAS. The full statement will, of course, appear in the record, without objection. [Material referred to follows:] UNITED STATES SENATE COMMITTEE ON THE JUDICIARY Statement of The Authors League of America on S.2044, To Amend The Definition of October 1, 1982 The Authors League of America is the national society of professional authors, with a membership of 11,000 authors and playwrights. The Authors League is grateful for this opportunity to testify in support of S. 2044, introduced by Senator Cochran. The Bill would prevent serious abuses of authors' rights that now occur under Clause (2) of the "works-made-forhire" proviso of Sec. 101 of the Copyright Act. S. 2044 would delete from Clause (2) three categories of commissioned works which it now permits to be considered as works-made-for-hire" under certain circumstances, thus protecting non-employee authors of such works from compulsion to surrender their valuable right of termination under Sec. 203. The three categories are: (1) articles , stories, poetry, graphic materials and other "contributions" to a magazine, anthology, encyclopedia or other "collective work"; (ii) components of a motion picture or other audio-visual work; and (iii) instructional texts. The Authors League statement is addressed primarily to the impact of Clause (2) on authors of contributions to periodicals and other collective works, but our comments apply to graphic materials, motion pictures and other audiovisual works, and to educational texts. Effect of S. 2044 S. 2044 would prevent publishers of collective works from compelling non-employee authors to sign agreements that transform their writings into "works-made-for-hire" and thus deprive the authors of the valuable right to terminate long-term or perpetual transfers of copyrights, 35 years after execution, and recover their rights, S. 2044 would not, as will be noted, end another serious abuse, the use of publishers' superior bargaining power to compel authors to transfer all rights in their works as a condition to first publication in a magazine, newspaper or other collective work. The Authors League earnestly recommends that the Judiciary Committee also consider this problem and possible amendments of Chapter 2 of the Copyright Act that would prevent publishers from depriving authors of income from subsequent uses of their works. Initial Ownership of Copyright " Consistant with the Constitutional mandate, the Copyright Act provides that copyright in an article, story, illustration or other work "vests intially in the author or authors of the work.' The true author of the work, i.e. the person who created it, is the author for Copyright Act purposes if the article, story, novel, poem, etc. was not - a "work made for hire". If, however, the contribution, book or other work is a "work made for hire", then the Copyright Act provides that "the employer or other person for whom the work was prepared is considered the author for purposes of this title..." (Sec. 201(b)). The "work-for-hire" proviso of Sec. 101 defines such a work as "(1) a work prepared by an employee as a work prepared by an employee within the scope of his or her employment... Clause (2) of Sec. 101 Sec. 101 contains a second definition which transcends the limits of the employment relationship and enables publishers to convert works by non-employee authors into "works made for hire -- to their benefit and the author's considerable detriment. Clause (2) of Sec. 101 provides that a contribution to a periodical or other collective work, an instructional text or a work in other specified categories is a "work made for hire" if: (a) it is specially ordered or commissioned; and (b)"if the parties (author and publisher) expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.' " Many publishers of magazines and other collective works have, since 1978, compelled countless non-employee authors to sign such agreements, thereby sharply curtailing the rights the Copyright Act was intended to provide to authors -- i.e. those who create literary or artistic works independently and not as an "employee within the scope of his or her employment." Because of their superior bargaining position, publishers are are able to insist that individual free-lance authors sign away their rights and the copyright in the publisher as "author", and depriving the true author of the rights and the privilege of terminating the assignement after 35 years. The Right of Termination Sec. 203 provides that the author of any work "other than a work made for hire", or the author's surviving spouse, children or grandchildren can terminate any transfer or license of a copyright or right it secures. The termination can take effect after 35 years from the date the transfer was executed. In the case of publishing contracts, it may take effect on the earlier of 40 years from execution or 35 years from publication. In their Reports on the Copyright Act of 1976, both Judiciary Committees said the provision was "needed because of the unequal bargaining position of authors, resulting, resulting in part from the impossibility of determining 9 a work's value until it has been exploited." Senate Report No. 94-473, 94th Paradoxically, the very inequality of bargaining power that prompted Usually, the only right under a copyright which the publisher itself exercises is the right to publish the author's article, poem, illustration or other contribution in its periodical and that is the only right the publisher actually pays for. But as a condition for agreeing to publish, a "Clause (2) agreement" because by artificially converting the work into one made for Thus, the publisher, rather than the author, has the right to license others to use the author's various subsidiary rights, and the publisher will receive all the proceeds. Authors are deprived of the ownership and economic benefit of the rights which the Constitution intended them to enjoy. And they are paid only for the right the publisher actually exercises, the right of publication; no publisher pays a higher price to compensate an author for any share of future income from his/her subsidiary rights lost by the compulsory divestiture of a "Clause (2) agreement". Publishers do not require the ownership of an author's copyright or exemption from the termination right, in order to protect the publication right they actually pay for and actually exploit. That protection is fully available to them under the Act when the author retain's ownership of his/her copyright and subsidiary rights. Nor is it necessary for a publisher to divest the author of his/her copyright, subsidiary rights and right of termination in order to make legitimately related uses of the contribution or other work it has published, This can be accomplished by reasonable contract provisions, without appropriating the author's copyright. Tie-In Transfers of All Rights S. 2044 would not prevent publishers from requiring an author to assign his/her copyright and all rights under it as a condition for the publisher's agreement to publish the work in its periodical. A contract for such a transfer is effective so long as it is in writing and signed by the author. The publisher can acquire the rights for 35 years, or for the duration of the copyright if the termination right is not exercised, For the reasons discussed above, the Authors League urges the Committee also consider this problem and possible amendments of Chapter 2, to deal with it. |